Saudi Arabia has reportedly announced that it is ready to reduce its oil production if Iran agrees to freeze its own output over the remaining months to the end of 2016, Reuters reported on Friday.
The offer, which has yet to be accepted or rejected by Tehran, was made earlier this month, according to unnamed sources.
The report states that the Saudi kingdom has expressed its willingness to cut its oil production to levels seen early this year in exchange for Iran freezing its output at the current level of 3.6 million barrels per day.
However, the source has not specified how much Riyadh would cut if Tehran accepts its offer. From January to May, Saudi Arabia produced around 10.2 million barrels per day.
Until last January, Iran was under sanctions that limited its oil exports to 1 million barrels per day and also barred foreign investments in its oil industry.
This is a notable change in the Saudi policy, which led the current policy implemented by OPEC in 2014 by refusing to cut output alone to support prices and chose to defend market share against rivals, particularly high-cost producers.
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The move provoked a fall in oil prices which led to a boost in global oil demand and a decline in high-cost supplies affecting several oil producers, especially those in Latin America.
OPEC members like Venezuela and Ecuador have been trying to persuade oil-rich countries to cooperate in cutting oil production amid a supply glut that has pushed prices down.
Saudi Arabia, which maintains huge influence in OPEC, is currently running into economic difficulties after it opted to flood the market and drive out its rivals.